There is excitement in the automotive market every time a new model is launched. From the assembly line to sales, everybody must collaborate to balance supply and demand within each market. And this is no standardised undertaking, as every launch is different. Assembly plants must produce within allocated time frames, and quality and technical teams must find the right balance between batch validations, reworks and postproduction operations. Subsequently, logistics teams have to monitor handovers between stages and must book the right capacity with local road and rail freight providers at the right time to avoid demurrage costs or other surcharges related to exceeding transport capacity.
In addition to these challenges, National Sales Companies (NSC) and importers add pressure to distribute more units to their local distribution compounds in order to maximise sales opportunities, resulting in time-consuming calls and emails asking what stock is available and when it will arrive. Obtaining meaningful information about the real-time whereabouts and the estimated time of arrival (ETA) of goods during a new vehicle launch can consume significant means and resources. That is, if companies continue to operate in an unstructured and manual fashion.
The value of real-time visibility
The real-time transportation visibility (RTTV) of goods is no longer considered a “nice-to-have”, but rather a “must-have” capability. In the B2C world, grocery home deliveries are now normal, and customers expect timely updates on their order. While this level of information may be unnecessary when a customer purchases a new car online, within a B2B context there are clear benefits for automotive manufacturers and their (internal) customers.
RTTV enables companies to decrease freight costs through better carrier management while increasing the productivity of manufacturing or warehouse employees. It also enables them to improve the productivity of customer service employees who will no longer, or at least not as extensively, need to communicate with dealers. Plus, the costs of urgent and exceptional transports can be significantly diminished.
Another benefit relates to technological innovation. Most of the automotive companies use Electronic Data Interchange (EDI) technology to securely share data with partners. Compared with EDI, new Application Programming Interfaces (APIs) offer faster, more cost-effective ways to connect systems and share information. Below is a summary of the key differences:
When choosing an effective RTTV platform, it’s essential to ensure it is fully compatible with both API integrations and mobile applications. It should also leverage telematics and transport management system (TMS) integrations to automatically capture exact departure and arrival times and locations, which enables users to trigger events when geofenced zones at delivery sites are entered. Given the high value of cars and the volume of daily departures from assembly plants, vehicle compounds and ports, the ability to instantly confirm the arrival or departure of vehicles has a significant positive impact on the cash flows of OEMs.
Improve the customer experience
Following some large Finished Vehicles Logistics (FVL) carriers’ digitalisation initiatives, web portals now allow dealers or NSCs to see the latest workflow status for ordered units. But in most cases, the ETAs tend to be calculated on only theoretical lead times. As a result, emails are still being exchanged regarding shipments in transit, and response times range from one to four days, depending on whether the unit has been transported by a managed fleet or a subcontractor. Full visibility in the automotive sector would improve the customer experience by reducing the number of “where’s my car” enquiries.
Shift from manual to automated
Further value is added through day-to-day benefits for employees monitoring vehicle launches. For example, the inefficiency of using spreadsheets filled with launch unit lists costs carriers’ and NSC’s logistics teams days of work on double checking in-transit and ready-for-transport units. It also requires continuous manual updating due to a lack of connectivity amongst FVL partners’ systems. For these reasons alone, implementing real-time visibility across outbound transport processes for finished vehicle logistics greatly improves overall efficiency and success rates by increasing car availability and on-time delivery during the launch phase. With RTTV tracking, teams can focus on exceptions and reduce the risk of missed demonstrations. This helps FVL professionals to get back on track faster while also allowing dealers and NSCs to concentrate efforts on selling and increasing pre-orders.
Visibility as the basis for a control tower
In order to ensure a smooth vehicle launch, most OEMs already have a pre-established responsibility assignment matrix covering roles and responsibilities between all parties. When it comes to measuring and following success on a daily basis, a control tower solution is a must.
However, in order for a control tower to be effective, it is necessary to have a basic layer of visibility in place. This basic layer helps to reduce days on hand, reduce risks, and improve reliability. It is a foundation for establishing connections with integrated business planning systems, TMS, WMS and ERP systems.
Why carriers benefit from real-time transportation visibility
In addition to the benefits for shippers, RTTV is also beneficial for 3PLs and carriers, enabling them to transmit real-time information to shippers by securely collecting real-time data from their systems and sending it to their customers’ platform of choice. Data can be collected from onboard telematics, installed on trucks, or on TMS or other internal IT systems. The automated data collection eliminates the need for time-consuming calls or emails, and any manual input of delivery information into multiple shipper portals. In addition, delivery times can be proven more objectively to clients, as they are precisely recorded using GPS data and geofences. By providing shippers with access to real-time and predictive data on deliveries, carriers are able to stand out from their competition. The tools available today help to make new vehicle launches smoother and easier than ever before, helping both 3PLs and OEMs to stay competitive in a fast-moving world.